Expanded gambling emerging as only budget option

Thursday

May 24, 2007 at 12:01 AMMay 24, 2007 at 9:49 PM

SPRINGFIELD -- Members of the Illinois House and Senate are shying away from raising taxes this spring, increasing the chances they will approve only a limited-growth budget that focuses on education and construction projects.

Doug Finke

By DOUG FINKE

STATE CAPITOL BUREAU

SPRINGFIELD -- Members of the Illinois House and Senate are shying away from raising taxes this spring, increasing the chances they will approve only a limited-growth budget that focuses on education and construction projects.

In a rare Statehouse news conference Wednesday, House Speaker Michael Madigan, D-Chicago, said there is not enough support among House Democrats to pass either an income or sales tax increase. He said expanded gambling and closing corporate tax loopholes have more support among Democrats, but still not enough to be enacted without Republican help.

Several Senate Democrats, meanwhile, said expanded gambling is emerging as the one revenue generator most of them are willing to talk about.

“It’s probably the best solution as we talk today,” said Senate Majority Leader Debbie Halvorson, D-Crete. “So far, it’s the only thing everybody can come up with.”

Earlier this week, Madigan asked his members which, if any, tax hikes they would support to pay for additional state spending. On Wednesday, he said only 38 of the 66 House Democrats supported some kind of income tax hike. The number dropped to 10 for a sales tax increase.

“The results are pretty obvious there’s not sufficient support in the House for an increase in the income tax or an increase in the sales tax,” Madigan said. “I think a large part of the reason for that would be … the governor in terms of all of the veto threats he’s issued over the last several weeks.”

Gov. Rod Blagojevich repeatedly has said he will veto any increase in the income or sales tax if lawmakers approve one. The House, though, voted overwhelmingly against his plan to impose a $7.6 billion gross-receipts tax on the state’s largest businesses to pay for universal health insurance and increased education spending.

Madigan said 50 Democrats favor closing corporate tax loopholes, although he warned that support would likely dwindle as specific loopholes are discussed. Forty-one support more gambling, he said, and although that is short of the 60 votes needed to pass a bill in the House, he noted that Republicans have come out in favor of expanded gambling to pay for a state construction program.

“I have an interest in that,” Madigan said. “I suspect we will have further discussions (with the Republicans).”

But there are different gambling proposals floating around the Capitol and agreeing on one may prove difficult.

House Republican Leader Tom Cross of Oswego floated a plan earlier this year that would allow existing casinos to expand their operations. He said the approximately $500 million a year generated could be used to underwrite a $5 billion construction program for roads, schools, mass transit and higher education.

Senate Democrats, though, are talking about a plan to expand existing gambling operations and add three or four new casinos, including one in Chicago. Sen. Rickey Hendon, D-Chicago, said the proposal might also allow horse-racing tracks to install slot machines to augment their revenues.

Hendon said the gambling plan could be used to pay for more than construction.

“If this is the only new revenue, then of course we’d have to spread (the money) around,” said Hendon, who estimates at least $2 billion a year could be raised. “The governor’s health-care plan will get some of the money, and education and capital. It appears that it might be the only game in town.”

Cross, however, said he does not want to add any more casinos in Illinois, nor does he want slot machines at horse tracks.

Madigan declined to say what gambling proposal he would support.

Madigan’s announcement Wednesday that there is little support for a tax increase among Democrats further muddies the state’s budget picture with just eight days left before the legislature is scheduled to adjourn. Madigan said most Democrats want increased education spending and a construction program, but are tepid about Blagojevich’s universal health-care plan.

House Democrat budget experts warn that the state does not have enough money to cover built-in increases in expenses such as union contracts and pension payments, let alone to spend more on education in the fiscal year that begins July 1. Without a revenue increase, that could result in cuts to some state programs.

Rep. Frank Mautino, D-Spring Valley, said Democrats were aware of that before they responded to Madigan’s tax survey.

“If there’s no change in that (survey), you will have a very small or no-growth budget,” he said.

Blagojevich spokeswoman Rebecca Rausch said the governor’s office is “not going to speculate about the possibility of a no-growth budget yet.”

“We look forward to sitting down with (Madigan) and talking about the issues he raised,” Rausch said.

That meeting could occur as early as today if scheduling can be arranged. Madigan said he tried to meet with Blagojevich Wednesday, but the governor was not available. Rausch said Blagojevich returned to Chicago after being in Springfield Tuesday.